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These are heady days in Beijing. The world has embraced China as an emerging superpower, and on the surface, little contradicts such a view.

China's economic reach stretches from Brazil to Bangladesh to Botswana. In 2003, China's gross domestic product was $1.4 trillion, and it promises to overtake the United States by 2050 or even earlier. Once a reluctant actor in international security affairs, China now hosts the six-party talks on the North Korea nuclear issue, sends peacekeeping troops to Haiti and engages directly in hot-spot issues such as Darfur and Iran. China's leaders have proved deft diplomats, initiating a stream of proposals for multilateral trade, security and political cooperation.

But Beijing is very probably nearing the end of a good run. China's success, while generally heralded throughout the world, is triggering a negative response from its neighbors. The United States is renewing its focus on the region, proposing free trade agreements of its own in Asia. Japan is in the midst of a significant domestic debate over its China policy. Recent surveys show that a majority of the Japanese population wants to cut development assistance to Beijing, and revised defense guidelines released by Tokyo this month single out North Korea and China as security threats.

Even the smaller nations of Southeast Asia are hedging their bets, improving their relations with other powers, such as India, and with each other. In a speech before the Assn. of Southeast Asian Nations, newly elected Indonesian President Susilo Bambang Yudhoyono called for the regional organization to deepen its own integration as a single market in response to the rise of China and India.

The real obstacle to China's continued emergence as a regional and global leader, however, rests within China itself. Without political institutions that are transparent, accountable and capable of applying laws systematically, China's proposals for international cooperation on energy development, intellectual property rights and public health and its actions on trade make for good public relations with little substance. The highly touted China-ASEAN free trade pact signed in November is an example. Close observers note that the more than 100 exceptions in the agreement, which would eliminate tariffs between China and the members of ASEAN by 2015, render it far less substantial than has been advertised.

Real political reform will be needed to convince China's partners that it can deliver on the hard decisions and local implementation that regional cooperation will require. China's handling of the SARS health crisis in 2003 underscores the link between its governance problems and the need for international skepticism in accepting Beijing's assertions of leadership. The lack of openness about the spread of the disease within China and the initial cover-up had devastating significance for the entire region.

After the SARS crisis, Premier Wen Jiabao promised to do better, but progress toward a more open political system has been uneven at best. More independent media have flourished occasionally, but the Department of Publicity (formerly the Propaganda Bureau) recently banned publishing any unauthorized reports of demonstrations, strikes, riots and acts of sabotage, and prohibited any discussion of what the Communist Party calls "public intellectuals." Earlier this month, after initially sponsoring the event, Beijing canceled an international meeting of union and business leaders scheduled to discuss a range of issues, including workers' rights and child and forced labor.

The world is right to encourage China's deepening sense of commitment to responsible international behavior. Yet leadership requires more than a growing economy and a desire to lead. It also requires a capacity to develop sound policies that can be implemented effectively and fairly both at home and abroad. After all, if the Chinese government cannot govern its own people effectively, there is no reason to trust that it can lead in the rest of the world.

Elizabeth Economy and Adam Segal are senior fellows at the Council on Foreign Relations in New York.

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